The GDPNow model from the Atlanta Fed estimates the GDP growth for the third quarter of 2025 at 2.5%. This estimate hasn’t changed after the economic data released on August 15. Recent information from important US institutions shows that personal consumption spending for the third quarter has increased from 2.0% to 2.2%. On the other hand, growth in gross private domestic investment has been lowered from 7.3% to 6.6%.

Economic Data Contributors

These figures use the seasonally adjusted annual rate, incorporating data from the US Census Bureau and the Bureau of Labor Statistics. The Federal Reserve Board and the Treasury’s Bureau of the Fiscal Service also significantly contribute to this data. An updated GDPNow estimate will be available on August 19. For those interested in tracking economic growth, future release dates can be found in the “Release Dates” section. With the GDPNow estimate steady at 2.5%, it reflects a strong US economy. This number suggests there’s neither a sharp slowdown nor significant overheating, likely allowing the Federal Reserve to maintain its current policy. For traders, this indicates that large interest rate cuts are not likely coming soon. This stability may reduce overall market volatility for a while, a trend we’ve observed throughout much of the summer. The CBOE Volatility Index (VIX) has been around 14, well below its average of about 19, which makes options cheaper. This could be a good time to buy protective put options on major market indices or create long-volatility trades for potential market changes later this quarter.

Trading Strategies

The report shows differences we can trade on: personal consumption is growing, while private investment is declining. This suggests strategies favoring consumer discretionary sectors over those sensitive to capital spending, such as industrials or commercial real estate. We might look at call options on consumer ETFs and put options on industrial sector funds to capitalize on this divide. Looking ahead, an important event this month is the Jackson Hole symposium at the end of August. Given steady growth and the recent July 2025 Consumer Price Index (CPI) data showing core inflation at 3.1%, any hawkish comments from Fed officials could shake the market’s calm. Traders should be prepared for potential volatility around that event. Growth staying above 2% supports the Fed’s decision to keep rates steady after the hikes in 2022-2023. This likely means options on short-term interest rate futures will continue to reflect expectations that rates will remain high for an extended period. Thus, betting against rate futures could be a smart strategy. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now